EU climate funds misused with billions potentially misallocated, say EU auditors 

A significant portion of the funds allocated to support EU climate objectives and the green transition might have been misused, says a new report by the European Court of Auditors. It also highlights that some projects funded as “green” were less environmentally friendly than they appeared.

The European Court of Auditors has revealed that billions from the EU’s Recovery and Resilience Facility (RRF), established in 2020 to support economic recovery from the pandemic, may have been misallocated. The fund was designed to prioritise climate action and green transition, with at least 37 per cent of the budget to be allocated to these areas. 

According to the Commission, this had been amply achieved: 42.5 per cent of the funds - equivalent to 275 billion euros - had been allocated to climate-related plans. However, the Court of Auditors now challenges this figure, estimating that 34.5 billion euros less was spent on green projects than reported.

Some projects, the Court argues, had little direct connection to the green transition. One example is an IT project aimed at digitising water supply systems, which was labelled as contributing to climate action despite its limited environmental impact. 

Others, in turn, were less environmentally friendly than they appeared. In one case, for example, a hydropower plant with pump storage, which caused water pollution, was funded without a proper assessment of its environmental consequences.

According to the Court of Auditors, the EU’s system of ranking projects’ climate contribution was thus not specific enough, which has led to exaggerated claims and misallocation of funds.

In response, the Commission defended its approach, maintaining that over 42 percent of the budget had been allocated to green projects and that its methodology was sufficiently accurate.

^{Wind turbines © BELGA PHOTO ERIC LALMAND}